A privileged profession? Challenging regulatory exclusion for legal professionals in the fight against money laundering in Australia

Criminals seek the involvement of legal professionals for their skills and services to facilitate laundering of proceeds from crime. Despite this risk, Australia remains non-compliant with international anti-money laundering (‘AML’) standards set by the Financial Action Task Force, which urge States to impose AML duties on lawyers, legal professionals and notaries (‘legal professionals’). The lack of regulation heightens Australia’s attractiveness as a destination for transnational criminal groups, and it continues to impair the ability of law enforcement agencies to detect, disrupt and deter organised crime.

Opposition to the imposition of AML obligations on the legal profession is commonly deployed by the legal industry itself, namely the Law Council of Australia (‘LCA’) – the peak national representative body of the Australian legal profession, which has successfully lobbied against regulation since the inception of Australia’s formal AML framework. The LCA’s resistance is predominantly framed around liberal democratic notions that imposing AML obligations conflicts with a lawyer’s professional obligations to protect their client's confidentiality and uphold legal professional privilege (LPP).

This thesis challenges the veracity of the LCA’s position and suggests that globally compliant AML obligations can co-exist with the obligation to uphold LPP. While Australia may be one of the last countries globally to implement AML duties on legal professionals, lawmakers have the benefit of considering best practices from comparable, compliant jurisdictions. Through a comparative, critical doctrinal approach, the author evaluates the regulatory framework adopted for the regulation of legal professionals in the United Kingdom. As reform is inevitable in Australia, this thesis presents recommendations for Australian policymakers, regulatory bodies, government authorities, legal professionals and international stakeholders seeking to refine AML obligations on legal professionals in their respective jurisdictions. This research is important as money laundering is inextricably linked to the success of serious organised crime, which causes severe human and economic harm.